Shareholder Group Calls on HSBC to Restrict Financing of Coal in Emerging Markets
March 06 2019 - 1:29AM
Dow Jones News
By Maitane Sardon
A group of HSBC Holdings PLC (HSBC) shareholders representing $1
trillion in assets either under management or stewardship have
called on HSBC Bank to stop financing coal power projects in
Bangladesh, Vietnam and Indonesia.
In a letter, the group highlights the knock-on effects of
investing in banks that are still tied up in coal as legislation
clamps down on fossil fuels and the energy mix moves toward cleaner
energy sources.
"By financing coal power sector expansion in these three
countries, HSBC is facilitating the lock-in of high-carbon
infrastructure and avoidable emissions, and failing to support
these countries in the transition to a low-carbon economy," the
investors said.
They have requested that the bank aligns with leading peers such
as Standard Chartered PLC (STAN.LN), which announced last year that
it will stop financing new coal power plants everywhere in the
world.
In response to the letter, HSBC said it is committed to helping
its customers "make the transition to a low-carbon economy in a
sustainable way".
HSBC is making a "targeted" exception for these three countries
until 2023 "in order to appropriately balance local humanitarian
needs with the need to transition to a low-carbon economy," said
Daniel Klier, global head of sustainable finance at HSBC.
This exception only applies as long as "independent analysis
confirms that there is no reasonable alternative to coal and any
new plant complies with the highest efficiency standards," Mr.
Klier said.
The letter was supported by responsible-investment charity
ShareAction and included signatories such as investment management
firms Schroders PLC (SDR.LN), Hermes Investment Management and
EdenTree.
The action follows several successful investor engagements on
climate change, which saw coal producer Glencore PLC (GLEN.LN)
recently agree to limit its production of the fossil fuel.
Write to Maitane Sardon at maitane.sardon@dowjones.com
(END) Dow Jones Newswires
March 06, 2019 01:14 ET (06:14 GMT)
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